A snippet from a recent newsletter: "Reports are of some gold moving across borders literally in tons. If true, this means some VERY big players mistrust the global economy. They want gold, and they want it in their hands."

A snippet from a recent newsletter: "Reports are of some gold moving across borders literally in tons. If true, this means some VERY big players mistrust the global economy. They want gold, and they want it in their hands."

If they mistrust the GLOBAL economy, across which borders would these big players move their gold? Perhaps it's time to invest in canned foods and lock yourself into the bomb shelter. Without a computer._________________florian - ny22

There is an incredible amount of foolishness among the worlds central banks. It will eventually create a panic. That could be in 10 years or 10 weeks. We don't know.

"Well, I woke up this morning, I got myself a beer / Well, I woke up this morning, and I got myself a beer / The future's uncertain, and the end is always near" -- The Doors_________________{JP:}====****

Time to revive this thread to look at the latest legal wranglings over the meltdown of the economy due to de-regulation.

Quote:

WASHINGTON — Negotiations between the Justice Department and JPMorgan Chase & Co. have hit a stumbling block that has put the talks at risk, a person briefed on the discussions said Tuesday.

A week and a half ago, JPMorgan tentatively agreed to pay $13 billion to settle allegations surrounding the low quality of mortgage-backed securities it sold in the run-up to the 2008 financial crisis.

One of the unresolved issues in the talks: JPMorgan says it should be able to seek money from a receivership involving Washington Mutual, a failed savings and loan that JPMorgan purchased in 2008, said the person, who spoke on condition of anonymity because the source was not authorized to speak by name about the matter.

The receivership is overseen by the Federal Deposit Insurance Corp., the independent agency created by Congress to maintain stability in the banking system.

The FDIC's position is that JPMorgan is responsible for any liabilities regarding the acquisition of Washington Mutual.

The two sides also disagree over whether the bank can face criminal charges. The tentative $13 billion deal only covers civil issues, said the person briefed on the discussions. In a proposal made Sunday night, the bank said it wants to limit any possible criminal exposure to a single ongoing criminal investigation in California, according to the person, who said talks are continuing.

Justice Department spokesman Brian Fallon said: "I have no comment on the rumors about the talks with JPMorgan." JPMorgan spokesman Mark Kornblau in New York declined to comment.

On Friday, a government agency that oversees mortgage finance companies Fannie Mae and Freddie Mac announced that JPMorgan had agreed to pay $4 billion of the $13 billion involved in the tentative settlement. The $4 billion resolves claims that the bank misled Fannie and Freddie about risky mortgage securities it sold to them before the housing market collapsed.

JPMorgan sold $33 billion in mortgage securities to Fannie and Freddie between 2005 and 2007, according to the government. That was the second-most sold to Fannie and Freddie ahead of the housing crisis, behind only Bank of America Corp. The securities soured after the housing bubble burst in 2007, losing billions of dollars in value.

Fannie and Freddie were rescued in a taxpayer bailout in 2008 as they sank under the weight of mortgage losses.

Two important things here. first, it makes it clear that Freddie and Fannie bought loans that they had been misled on. Nobody settles a lawsuit for $4 billion unless they are likely to lose substantively. Second, the behavior may be criminal, and such a case remains active in California.

Time to reopen this thread. Just finished an article by William Greider in the Nation on the Federal Reserve and the run-up of debt, :http://www.thenation.com/article/178366/why-federal-reserve-needs-overhaul#

This organization, now 100 years old, gets grief from both sides as too powerful, to secretive, too effective, etc. Not sure I agree with all, or even much, of what Greider argues--but then that is why I read opinion pieces. But I found these snippets particularly interesting:

Quote:

An even harsher critic is Sheila Bair, former chair of the Federal Deposit Insurance Corporation, who had to liquidate hundreds of smaller banks during the crisis. “What system were we trying to save, anyway?” she asked in her under-appreciated 2012 book, Bull by the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself. “A system in which well-connected big financial institutions get government handouts while smaller institutions and homeowners are left to fend for themselves?…

“Because we propped up mismanaged institutions, our financial sector remains bloated. The well-managed institutions have to compete with the boneheads,” Bair wrote. “A culture of greed and shortsightedness” permeates even the best-managed banks, one that “goes undetected by their executives and boards as well as their regulators.” Bair is a conservative Republican, an insider disgusted with the failure of her fellow regulators....

During this profound shift, the central bank lost control of its central function: regulating the availability of credit. The result was a stunning run-up of debt, which has now become a mountain. Economist Jane D’Arista found that in the single decade of the 1980s, the debt of all US borrowers—total borrowing by federal, state and local governments, as well as by households, businesses and the financial sector—doubled. The nation’s total accumulated debt since the beginning of the Republic was $5 trillion in 1980. By 1990, it had reached $10 trillion. Reagan’s tax cuts contributed mightily to the buildup, but so did Volcker’s monetary policies. Commercial banks lost lending functions to unregulated financial markets, but the Fed’s regulatory system did not keep up.

“The central bank created monetary conditions that resulted in a debt bubble,” D’Arista wrote in her 2013 essay on the Fed at 100. “The failure to analyze what the cumulative effect of debt might be on the real economy was the Fed’s greatest failure since, in the aftermath of crises, debt remains a major impediment to the revival of economic activity.” She attributed the Fed’s weakening hold on credit expansion to relaxed regulatory enforcement. The debt bubble is what collapsed in 2008....

A stronger explanation for the mountain of debt was financial deregulation, which the Fed itself had championed....

Greenspan led the charge to abolish old rules. As Fed chair, he engineered dubious legal premises in the 1990s to let Citigroup violate the Glass-Steagall Act, which had imposed a firewall between investment banking and commercial banking, even before Congress repealed that New Deal law. Bill Clinton tagged along like a happy puppy.

In 1982, when the deep recession of that time ended, the Dow Jones average was at 800. The “super bull market” peaked at 14,000 twenty-five years later. The Dow’s value multiplied seventeen times, while the overall economy grew only five times.
That contrast defines the basic economic disorder: a great shift of wealth from the many to the few, from production and consumption to the financial sector. In the early 1980s, the financial industry’s profits were about 10 percent of all corporate profits. By 2007, it was claiming 40 percent. The value of all financial assets used to average a bit more than four times the Gross Domestic Product. By 2007, financial assets were ten times the GDP.

Then the music stopped.

Under Greider's argument, the monetary policies of the Fed, initiated and carried out as part of an orgy of regulation cutting by the senile actor from California and his henchmen, was the leading cause of the inflated bubble, and massive economic transfer from the middle class to the financial class. Bubba was just along for the ride. Perhaps too harsh--but certainly something to think about. Obama hasn't helped, but to give credit, he proposed, and Congress refused to go along with, incentive programs that would have helped Main Street.

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